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TOKYO: Most Asian stocks gained on Monday, extending the rally that took global equities to a record high after a US jobs report signalled the economic recovery remained intact but didn't yet warrant any immediate withdrawal of Federal Reserve stimulus.

Japanese markets, however, bucked the trend, with the Nikkei falling 0.5% following a surge in COVID-19 infections in Tokyo, just weeks before the city hosts the Olympics.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3%, led by a 1% gain in Taiwan. Chinese blue chips added 0.1%.

Trading is set to be thinner than usual with US markets closed for the extended 4th of July weekend, meaning "some of those upside moves might be capped and price action might be choppy," according to Kyle Rodda, a market analyst at IG in Melbourne.

"But given Friday's nonfarm payrolls numbers, things are still really, really optimistic, and I think you'll start to see that come through again as the week unfolds," Rodda said.

"Conditions are right for equities to continue to push higher right across the globe."

The MSCI All Country World index closed at a record 724.66 last week, and edged 0.1% higher on Monday.

S&P 500 futures pointed to a 0.1% dip for Tuesday's open, after the index closed 0.8% higher at a record 4,352.34 on Friday. The Dow Jones Industrial Average rose 0.4% and the Nasdaq Composite added 0.8% to hit a record.

US nonfarm payrolls increased by a bigger-than-expected 850,000 jobs last month. But the unemployment rate unexpectedly ticked up to 5.9% from 5.8%, while the closely watched average hourly earnings, a gauge of wage inflation, rose 0.3% last month, lower than the consensus forecast for a 0.4% increase.

"The goldilocks print suggests there is no need to accelerate the tapering timeline or the implied rate hike profile," Tapas Strickland, an analyst at National Australia Bank, wrote in a client note.

"Overall the level of payrolls is still 6.8 million below pre-pandemic February 2020 levels and is still below the level of substantial progress needed by the Fed. As such there is nothing in this report for the Fed to become hawkish about."

Eyes will be trained on the minutes of the Federal Open Markets Committee meeting from last month, when policymakers surprised markets by signalling two rate hikes by the end of 2023.

Commentary by Fed officials since then has been more balanced, particularly from Chair Jerome Powell, and investors will parse Wednesday's release for further clues on the timing of policy tightening.

US bond markets were closed for the holiday, after the benchmark 10-year US Treasury yield sank to 1.4306%.

The dollar was mostly flat on Monday after dropping from a three-month high at the end of last week, pressured by the weaker details of the US nonfarm payrolls report.

The greenback was little changed at 111.055 yen and $1.18615 per euro.

Gold edged up 0.1% to $1,789.46 an ounce.

Crude oil slipped as OPEC+ talks dragged on. Saudi Arabia's energy minister pushed back on Sunday against opposition by fellow Gulf producer the United Arab Emirates to a proposed OPEC+ deal and called for "compromise and rationality" to secure agreement when the group reconvenes on Monday.

Brent crude fell 29 cents to $75.88 a barrel, and US crude lost 24 cents to $74.92 a barrel.

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